Good morning, lovely people. It’s almost the end of what’s been a busy week on both the domestic and global fronts. Today’s issue brings more M&A, investment, and debt updates, along with new legislative amendments to Dubai’s Conciliation Law. Let’s dive in.

BUT FIRST- In case you missed it: Donald Trump rattled markets and sent the greenback down nearly 1% for a time yesterday as he stepped up his campaign against Federal Reserve chair Jay Powell. US media reported that the US president had earlier this week brandished a letter firing Powell and asked the lawmakers he was meeting with whether he should send it.

BACKGROUND- Trump has waged a blunt campaign against Powell for months now, pressuring him to cut interest rates and suggesting he’s open to firing Powell if the chairman doesn’t come to heel.

Where things stand now: “We’re not planning on doing anything,” Trump said overnight. “I don’t rule out anything, but I think it’s highly unlikely, unless he has to leave for fraud, and it’s possible there’s fraud.”

Wait, fraud? Powell? The guy’s a straight-shooter’s straight-shooter, but that hasn’t stopped Republicans from trying to trump-up (pun intended) charges against him. Trump’s winged monkeys are angling to use an over-budget, USD 2.5 bn project to renovate the Fed’s HQ against Powell.

WHY IT MATTERS- The news raised fresh doubts about whether the Fed would, under the next Trump-appointed Fed boss, continue to set monetary policy independent of political interference. It's not a stretch to say the independence of the Fed is one of the cornerstones of the global financial system. An independent Fed can make politically unpopular decisions — to, say, control inflation — without pressure from elected officials seeking short-term gains in popularity. Over the long term, an independent Fed is better able to deliver price stability and drive economic growth — that’s fundamentally what preserves confidence in both US financial markets and the greenback: global investors know that (today, at least) monetary policy is being set for economic reasons, not political ones. Go deeper with the Wall Street Journal here.

Can Trump really fire Powell? Maybe. A law on the books since 1913 gives the president the power to fire the Fed chairman, but only for “cause” — and what constitutes “cause” is largely undefined.

We’re going to cross the Rubicon one sooner or later: Powell’s term is up in May 2026.

Go deeper: The news is all over global front pages this morning, with each of the following outlets running multiple stories and explainers: Associated Press | Reuters | Bloomberg | Financial Times | Wall Street Journal.

WEATHER- Brace yourselves for more potential dust and rain today: Blowing dust in most parts of the country yesterday could continue today, along with potential for light rainfall in some areas, the National Center of Meteorology said in its forecast (pdf). The mercury is expected to hit 44°C in Dubai today, cooling to 35°C overnight. Abu Dhabi will see a high of 45°C, with lows of 34°C.

WATCH THIS SPACE-

#1- Filling the Wizz Air-shaped hole: UAE-based budget carrier Air Arabia Abu Dhabi — Wizz Air’s long-standing rival — is expanding its total operational capacity in 2025 by 40% y-o-y to address “rising demand for air travel to and from Abu Dhabi,” CEO Adel Al Ali said in a statement. The airline — a JV between Etihad and Air Arabia — added two Airbus A320s to its fleet, bringing its total to 12 aircraft with plans to add two more by year-end.

But it's “too early” to tell whether Air Arabia Abu Dhabi will absorb Wizz Air’s airport slots, even with its planned capacity expansion, CEO of Etihad Airways Antonoaldo Neves told The National. The Abu Dhabi budget airline still “requires airplanes […] and pilots and they need to study that,” Neves said.

Etihad is sweeping in too: Etihad Airways announced plans to launch several new routes to the Caucus, Central Asia, and KSA just a day after Wizz Air said it would suspend operations in the emirate. “These destinations were part of our 2030 plan,” Neves said. “Where there is a space in the market, someone is going to fill it in, and we have the agility to fill it. We saw a market [window] and we took it,” he added.

Up to 450 jobs are now in limbo: While Wizz Air offered a transfer to roles in Europe for affected staff, this won’t be viable for all employees, Bloomberg cites CEO Jozsef Varadi as saying on a video call with staff. There could be “impossible cases,” he said, citing visa and passport constraints, though the company pledged to support staff on a case-by-case basis.

#2- Adnoc to transfer OMV stake to new investment arm: Abu Dhabi National Oil Company (Adnoc) plans to transfer its 24.9% stake in Austrian energy firm OMV to its investment arm, XRG, pending regulatory approvals, according to a press release. The move is part of its plan to consolidate international assets under XRG — which will also hold the company’s proposed 46.94% stake in the upcoming Borouge Group International, once the transaction is completed.

XRG in brief: Launched last year, XRG is Adnoc’s global investment platform focused on low-carbon energy and chemicals, with over USD 80 bn in assets. It plans to double that over the next decade, with its five-year strategy. XRG plans to expand upstream M&A in the US and Canada, as well as grow its chemicals portfolio via Borouge and planned takeovers of Covestro and Australia’s Santos.

REMEMBER- Adnoc and Austria’s OMV finalized an agreement in March to merge their polyolefins businesses into Borouge International, creating a USD 60 bn global player headquartered in Austria with a regional HQ in the UAE. Adnoc acquired its 24.9% stake in OMV from Mubadala last year.

#3- Stonepeak to secure EUR 2.4 bn debt package to fund IFCO stake acquisition from Adia: Stonepeak is set to receive a EUR 2.4 bn debt package from a group of banks to finance its acquisition of a 50% stake in German reusable packaging firm IFCO Group from a subsidiary of the Abu Dhabi Investment Authority (Adia), sources familiar with the matter told Bloomberg.

The details: The financing is expected to refinance IFCO’s existing EUR 1.6 bn loan portfolio and provide an additional EUR 800 mn in fresh funding. Bank of America is among the banks involved, with Morgan Stanley and Citigroup also expected to participate, the sources said.The debt is anticipated to hit the market soon.

ICYMI- Adia’s subsidiary and Stonepeak inked an agreement to sell its 50% stake in IFCO last week, with the transaction expected to close in 4Q 2025. Triton, a European mid-market investment firm and current shareholder in IFCO, will retain its stake in the firm. Following the transaction, Triton and Stonepeak will hold equal ownership and joint governance of the company.

#4- The Central Bank of the UAE (CBUAE) will offer up to AED 27.8 bn in monetary bills (M-bills) at its upcoming auction on Monday, 21 July, according to a statement (pdf). The auction has four tap issuances, including two worth AED 4 bn with 28-day and 56-day tenors, a AED 4.3 bn one with a 140-day tenor, and a AED 15.5 bn issuance with a 308-day tenor. All bills will settle on 23 July.

Decoding central bank speak: M-bills are short-term, zero-coupon instruments issued in AED with typical maturities between one and 12 months. They are auctioned via competitive bidding to licensed dealers and are not publicly traded. Tap issuances allow CBUAE to reopen existing series to manage liquidity without issuing new instruments.

#5- UAE new federal budget revamp eyes priority sectors: The Finance Ministry’s next federal budget cycle for 2027-2029, which it has just launched, will focus on the education, healthcare, core government services, and social welfare sectors, according to Dubai Media Office. The new budget will also prioritize operational efficiency and AI integration. The 2027-2029 framework follows four consecutive cycles during which the total federal budget reached around AED 900 bn.

Public finances heading into the next cycle: Public debt levels remained stable, standing at AED 62.1 bn in June. At the end of last year federal government assets had reached AED 464.4 bn.

PSA-

Late to your first corporate tax filing? Act fast for a waiver: The Federal Tax Authority (FTA) is reminding businesses that to qualify for the AED 10k late registration penalty waiver for corporate tax, they must file their tax return or annual declaration within seven months of the end of their first tax period, it said in an X post. The waiver applies only to the first tax period, and covers both taxable persons and certain exempt persons required to register.

Fast fact: Around 38k additional entities have registered since the waiver initiative launched in April 2025, bringing total corporate tax registrants to 576k.

THE BIG STORY ABROAD-

Israel ramped up its bombing campaign in Syria yesterday, attacking the military headquarters in Damascus and hitting near the presidential palace in a major escalation. The attacks killed at least three people and injured more than 30.

The strikes came amid an intensification of violence in the southern city of Sweida in Syria between Druze militants, Bedouin groups, and Syrian security forces who were sent to quell the fighting.

The Syrian Interior Ministry announced a ceasefire later in the evening, while US Secretary of State Marco Rubio said in an X post that all parties have agreed on steps that will “bring this troubling and horrifying situation to an end tonight.” Syrian government forces were already moving out of Sweida last night. Several Arab countries later welcomed the news and condemned Israel's attacks on Damascus, including the UAE and Qatar.

The story is getting a lot of ink: Reuters | Bloomberg | Financial Times | Guardian | Wall Street Journal

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OIL WATCH-

The UAE’s crude output climbed to 2.99 mn bbl/d by 2Q from 2.94 mn bbl/d in 1Q, reflecting a 50k bbl/d jump, according to Opec’s monthly oil report (pdf). Total Opec production jumped from 26.8 mn bbl/d to 27.02 over the same period.

REMEMBER- A hike is on the way: The oil group agreed to raise production by 548k barrels per day in August, accelerating its plan to return supply to the market and surpassing expectations for the size of the hike. The August hike is larger than previous monthly increments of 411k bbl / d for May, June and July.

The group expects oil demand growth to remain around 1.3 mn bbl/d in 2025, in line with last month’s expectations.

The International Energy Agency’s forecast is less bullish on oil demand, forecasting demand growth of just 700k bbl/d in 2025 — its lowest rate since 2009 excluding the pandemic years, according to the International Energy Agency’s (IEA) monthly report. The forecast follows a softer-than-expected second quarter in 2025, where annual demand growth slowed to just 550k bbl/d, down from 1.1 mn in the first quarter. Demand is expected to jump by some 720k bbl/d in 2026.

Production rose by some 950k bbl/d m-o-m in June to hit 105.6 mn bbl/d, driven largely by increased production from Saudi Arabia and other Opec+ producers. For the full year, world supply is expected to climb by 2.1 mn bbl/d, reaching 105.1 mn bbl/d. The trend is expected to persist into 2026, with another 1.3 mn bbl/d of growth projected—mostly from non-OPEC+ sources.

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